Sierra Wireless files complaints about Nokia's patent licensing

Loek Essers |
Nov. 22, 2013

Sierra Wireless wants the European Commission and the U.S. Federal Trade Commission to sanction Nokia.

Canadian wireless modem maker Sierra Wireless has filed complaints with the European Commission (EC) and the U.S. Federal Trade Commission (FTC) claiming that Nokia is behaving unfairly in patent licensing.

For its part, Nokia claims that Sierra Wireless has been in breach of its existing license terms for years.

Nokia is abusing its position as the holder of 3G and GSM (2G) standard essential patents (SEPs), said Sierra Wireless in a news release.

Standard essential patents are patents that are deemed essential to implementations of industry standards. Companies are usually required by standards bodies to license those patents on fair, reasonable and non-discriminatory (FRAND) terms. What exactly is a fair and reasonable licensing price is often a point of dispute between companies.

In the complaint filed with the Commission, Sierra Wireless alleges that Nokia applies widely different, and therefore unfair, royalty rates for the same SEPs to make identical GSM wireless modules, the company said. Nokia also imposes unfavorable and unreasonable royalty terms that put Sierra Wireless at a competitive disadvantage, it said.

The company has been seeking a mutually acceptable resolution of the royalty rate issues and a license to use Nokias 3G SEPs, but got no clear response from Nokia, prompting its EC complaint, it said. Sierra Wireless believes that Nokia is in breach of the Treaty on the Functioning of the European Union and requirements set by the European Technology Standards Institute (ETSI).

The company wants the EC to investigate and require Nokia to reveal the pricing for 2G and 3G SEP licenses with other licensees, end the breaches outlined in the complaint, sanction Nokia, and require these patent licenses to be granted on FRAND terms, it said.

In addition, the FTC was notified of the complaint and asked to open an investigation into the alleged breach of FRAND rules and U.S. laws on fair trade and monopoly practices by Nokia. Sierra Wireless also asked ETSI to investigate Nokia for its alleged FRAND behavior breach.

The EC has received the complaint and is looking at it, a Commission official said in an email.

Nokia said in an emailed statement that Sierra Wireless has been in breach of its existing license terms with Nokia for several years.

"Despite many years of good faith attempts by Nokia to resolve the disagreements, Sierra has failed to pay Nokia the royalties which Sierra owes under the license," , Nokia spokeswoman Nina Ratavaara said. She called the complaints frivolous.

"As Sierra is now pursuing these abusive tactics, seeking to continue to use Nokias innovations without paying the agreed royalties, Nokia will take whatever steps are necessary to protect our intellectual property, our rights and our reputation," she added.